Inner Cities

– in the House of Commons at 10:13 pm on 30th January 2002.

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Motion made, and Question proposed, That this House do now adjourn.—[Dan Norris.]

Photo of John Robertson John Robertson Labour, Glasgow Anniesland 10:14 pm, 30th January 2002

It gives me great pleasure to have secured this debate, and I want to focus on how we should strive to break the cycle of poverty in our inner cities. Poverty manifests itself in a number of ways: lack of access to good-quality housing, poor health, high levels of unemployment, low rates of pay, high crime rates, and poor educational performance. Unlike the Tories, the Labour party believes that poverty breeds further poverty, that unemployment can lead to crime, and that living in poor, overcrowded housing can result in poor health and have a detrimental effect on a child's education. Each aspect of poverty is linked, and we cannot effectively tackle one aspect without tackling all of them.

I want to use the debate to focus on the effects of unemployment on our inner cities, and to consider how poverty affects pensioners, who have passed employment age, and children, who have yet to reach it. I shall focus on my constituency, but I shall also use our experiences in Glasgow to examine the position more broadly in Scotland and in the United Kingdom as a whole. Above all, I want to use this opportunity to pose questions and to offer solutions.

Our children are our future, so tackling childhood poverty is crucial, not least because our children need and deserve to grow up in a secure and protective environment, and because childhood experience lays the foundations for later life. Children's experiences and their outcomes in later life are fundamentally influenced by their family circumstances. Children growing up in low-income households are more likely to have poor health, do badly at school, get involved in crime and later in life become unemployed and earn lower wages. That is why I welcome the pre-Budget report "Tackling child poverty".

I welcome the excellent start that the Government have made. Families with children in the poorest fifth of the population are now on average £1,700 a year better off. There have been increases in child benefit, and the introduction of the children's tax credit has been announced. There are now 1.2 million fewer children in poverty as a result of the measures that we have introduced since 1997. If we are to reach our target of halving child poverty by 2010, we must ensure that this programme continues, that progress is regularly monitored, and that the initiatives are implemented as a result of changing circumstances.

I should now like to consider how poverty affects our pensioners. My constituency has one of the highest concentrations of people aged over 60, not only in the UK but in Europe. Almost a third of the electorate are over the age of 60. I wholeheartedly welcome initiatives such as the minimum income guarantee and the pensioner credit, which have taken some of our poorest pensioners out of poverty.

Although I realise that the introduction of the stakeholder pension will ensure that future pensioners have an income that will protect them, a great many elderly people in Glasgow, Anniesland do not have any pension other than the state pension. The Government must ensure not only that we protect future pensioners, but that the needs of today's pensioners are recognised and addressed.

Approaches are being taken to ensure that successful regeneration is shared by our citizens and, in particular, helps unemployed people get back into work. My hon. Friend Ann McKechin has an Adjournment debate on Friday, and she will draw attention to the problem of unemployment in Glasgow. I shall focus on a few key areas.

I have had a long-standing interest in schemes designed to reduce unemployment, particularly the intermediate labour market and transitional employment initiatives. The Wise group pioneered the ILM approach in Glasgow some 18 years ago, and local authority housing was insulated and improved at the same time. From 1996 to 2001, ILM projects in Glasgow ensured that some 7,500 long-term unemployed people found jobs.

Glasgow's economy has been doing rather well in recent years. The number of jobs in the city rose by 8 per cent. between 1996 and 2001—from 346,000 to 375,000, which is an increase of 29,000 jobs. Over the same period, the number of jobs in Scotland as a whole grew by only 0.2 per cent. Registered unemployment in Glasgow has fallen from 32,000 in 1996 to the current figure of 18,000, which is a fall of 44 per cent. compared with 34 per cent. for Scotland as a whole.

Despite that initially positive picture, it must be remembered that the starting point is poor. The unemployment rate in Anniesland is 6.9 per cent., more than double the national average, and some areas in Glasgow still have some of the worst unemployment levels in the United Kingdom. Despite a recent upturn in its economic performance, parts of Glasgow are missing out. In its deprived areas there are social inclusion partnerships, known as SIPs, where additional help is given. There are two SIP areas in Anniesland, but that is not enough.

In some parts of Glasgow the average employment rate is only 33 per cent., compared with a Scottish average of 78 per cent. The employment rate in Glasgow as a whole is only 58 per cent. Why are parts of the city not benefiting from the recent economic upturn? One reason is that about half the jobs belong to commuters, who work in Glasgow but do not live there. The other main reason, on which I shall focus, relates to the large number of people receiving some form of income support.

In 1999, 19,000 people were officially registered unemployed but more than double that number—39,000—were claiming incapacity benefit. A further 19,000 were receiving lone parent premium, and 42,000 were receiving other benefits. That amounts to a grand total of 119,000. The officially defined unemployed form only 16 per cent. of the total number of unemployed people in the city.

That is partly due to the last Government's manipulation of the unemployment figures. They deliberately moved people out of those figures, and into the benefit figures. Those unregistered unemployed people would be better described as the hidden unemployed. Incapacity benefit claimants, in particular, significantly outnumber the officially registered unemployed in Glasgow. Even if we accept that many of the hidden unemployed could work given suitable support and opportunities and that real medical, physical or social reasons prevent many others from entering the labour market, that still leaves a large number who are unemployed and capable of work, but not included in the official unemployment figures.

Some may ask whether this really matters. I happen to think that it does. If Glasgow's employment rate is to get anywhere near the Scottish average, we must find ways of helping the hidden unemployed to get into work. Glasgow needs more of its people to be actively engaged in the labour market.

Photo of Ian Davidson Ian Davidson Labour/Co-operative, Glasgow Pollok

Is not one of the barriers the high rent and council tax in Glasgow? The loss of rebates is a serious disincentive to becoming employed. Glasgow city council has come up with a useful proposal that would allow them to be continued for those who stay in work, but a council tax cut is also needed. Glasgow needs a fair share of the money that is available.

Photo of John Robertson John Robertson Labour, Glasgow Anniesland

That is an excellent point. It is part of the reason why people get into such a state with the benefits system. My hon. Friend has obviously read part of my speech, although I did not let him see it in advance.

At present most schemes designed to help unemployed people are restricted to the officially registered unemployed, but in Glasgow, as I have said, there are far more unregistered unemployed residents. Many more unemployed people, both registered and unregistered, need to work in the city to get near the Scottish average employment rate. Does it make sense for so many Government and European schemes to be artificially restricted to helping jobseekers alone?

There are some signs that things are changing—for example, the new deal for the disabled with its emphasis on incapacity benefit claimants, and the action teams for jobs with their remit to assist the workless. But given the nature of unemployment in Glasgow and the number of unregistered unemployed people, we need more flexibility to use existing systems or new programmes to help that large group.

In the 1990s, the economic development agenda in Glasgow tended to focus on measures designed to reduce the official unemployment rate. That agenda needs 21st century ideas to concentrate on a more subtle strategy designed to increase the city's employment rate. Glasgow's economic potential cannot be effectively maximised until we get significantly more of our residents into work. Getting on one's bike to look for work is not the answer for those people. The last Conservative Government caused the problem and the Labour Government need to solve it. ILMs and transitional employment initiatives have a key role in implementing that agenda by focusing on those furthest removed from the labour market—what some call the hard-core, long-term unemployed.

Some pioneering developments involving ILMs are being developed by Glasgow city council in partnership with other local agencies. A proposal called the Glasgow full employment initiative is being developed, which aims to create full employment in specified deprived parts of the city. Each scheme would cover 400 to 500 households.

Within full employment areas, there would be a commitment that individuals or indeed whole households would be offered a regular job with continued after-care support, or a subsidised job with a full wage through an ILM scheme. They would be offered quality support and advice to overcome barriers to employment and full access to and integrated support from all existing employment services already available in the area.

If people later lost their job, the FEA would start them straight away in other alternative employment, which may be on an ILM scheme. The aim is that people will never again have to go on the dole. In effect, the FEAs would be offering a job guarantee. I would be interested to know whether the Minister can find ways to support that initiative.

The work of the FEAs will also involve proposals to the Scottish Executive and the UK Government for a pilot actively to use unemployment benefit and/or income support in a benefits transfer package. Technically, the legislation already exists to do that. At present, that is only available to registered unemployed working links clients. Permission will be sought for a benefits transfer pilot to be available to all the unemployed people with the FEA—registered and non-registered unemployed.

Glasgow's unemployment problems cannot be easily solved without changes at a national level in terms of the welfare structure and the avoidance of benefit traps. However, that does not mean that nothing should be tried locally to achieve full employment in deprived areas.

I think the Minister will agree that we need more flexible and innovative local labour market measures. We need fewer one-size-fits-all, top-down imposed approaches and we need to break down the artificial barriers that mean that help is available only to the registered unemployed and not to the non-registered unemployed. We need more freedom to explore the active use of unemployment and income support payments to meet individual employment and training needs.

There is no quick fix or magic cure as regards the best way to relieve poverty for the young, the old or, for that matter, the long-term, hard-core unemployed. For those furthest removed from the labour market, we will continue to need an array of different approaches and measures. However, I am sure that within the economic development toolkit there will always be a place for ILM or transitional employment type measures. The Minister will, I hope, be interested in what I have said about Glasgow's latest efforts in that regard.

The old adages, "No experience, no work" and "You need a job to get a job" still hold true for many people in Glasgow and other UK cities, particularly those furthest removed from the labour market. Because ILMs tackle that issue head on and provide unemployed people with much needed work experience, they must continue to be a major plank in economic development policies for cities. ILMs are not competing with the work first approaches of the employment zones or action teams for jobs. Instead they should be seen as complementary. Indeed, why not refer all those people who are failing to get jobs through the employment zones, action teams for jobs or the new deal to an ILM straight away?

I have raised important questions and, I hope, some solutions. They are a blueprint not just for Glasgow; I believe they could be developed in any of our inner cities. To use that much used saying, much has been done but there is much to do. I want to see this Government do it. 10.30 pm

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

Good evening, Mr. Speaker. I congratulate my hon. Friend John Robertson on securing a debate on inner-city poverty. I am also grateful for his kind comments on the Government's initiatives to tackle child and pensioner poverty, and the general poverty of those of working age. This debate is a unique experience, because I see in their places my hon. Friends the Members for Stirling (Mrs. McGuire), for Strathkelvin and Bearsden (Mr. Lyons), for Hamilton, South (Mr. Tynan), for Eastwood (Mr. Murphy), for Glasgow, Maryhill (Ann McKechin), for Glasgow, Pollok (Mr. Davidson) and your good self, Mr. Speaker, representing your beloved Springburn. My accent tends to give away my previous incarnation and even my hon. Friend Mr. Turner can claim that his mother was born in Cathcart. He just failed to get across the border and was born in Carlisle. My only question is where is the Scottish National party? We are debating strategies to end poverty in Scotland and the SNP is not even here.

We are absolutely committed to eradicating child poverty by 2020. Our strategy is outlined in "Opportunity for all", the annual report that sets out our progress. Significant progress has been made, but as my hon. Friend the Member for Glasgow, Anniesland made clear, much more remains to be done. There is a clear political commitment to tackling the problems of poverty and social exclusion. Poverty and social exclusion are complex, multidimensional issues and are not just about low income. My hon. Friend highlighted that point eloquently in his contribution this evening.

We are determined to ensure that there is opportunity for all, not just the privileged few. Tackling poverty is not just a social objective or a moral issue. It is also an economic necessity, because we all pay the price of poverty. Research shows that work is the best route out of poverty. Our strategy is to provide work for those who can and security for those who cannot. We are making real progress. I listened carefully to my hon. Friend's speech and to the intervention by my hon. Friend the Member for Glasgow, Pollok and I am very interested in the initiatives they described. I give my hon. Friend the Member for Glasgow, Anniesland a commitment that I will arrange for officials from Glasgow city council and from the Scottish Executive to meet officials from my Department to explore these proposals further. I will write to him when I have made those arrangements, which I hope to do shortly so that we can take forward the ideas that he set out tonight.

It is clear that the measures that we have already introduced are having positive effects on people's lives. We will continue to work to improve the opportunities available to all people looking for work. Today, as a result of a stable economy and measures to help people into jobs, some 300,000 fewer children live in a household where no one works. We are introducing new tax credits to tackle poverty and make work pay.

There are more than 1.2 million more people in work now than in 1997. We have increased the household incomes of 2 million of the poorest pensioners by at least £15 a week since 1997. We are tackling the legacy of poverty and social exclusion that we inherited. We are making progress, but, as my hon. Friend said, it has been slow and painstakingly difficult in some areas.

Photo of Mr John Lyons Mr John Lyons Labour, Strathkelvin and Bearsden

Will my right hon. Friend accept that the national minimum wage, presently £4.10, has played a constructive part not only in bringing people from unemployment to work, but in giving them some security when they take up work? We should try to uprate it regularly because that would make it more attractive for people to take up work.

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

As the Minister who introduced the national minimum wage, I am more than happy to endorse my hon. Friend's observation that, together with the working families tax credit and the changes in child benefit, the national minimum wage has made a significant difference. Women in my constituency were earning £1.20 an hour; after the introduction of the minimum wage and the WFTC they now have incomes of £11 an hour and four weeks' paid holiday. The minimum wage has risen consistently since its introduction, following the recommendations from the Low Pay Commission. We have also given the lie to the Tory claim that its introduction would cost a million jobs. Since its introduction, we have created more than a million jobs.

I thank my hon. Friend for his kind remarks and I will tell my father tonight that his Member of Parliament is doing a damn good job for him—although at 82 I am not sure that he wants to go out and earn the national minimum wage.

Colleagues, we have set clear objectives that require long-term commitment to year-on-year investment. They need more than just a short-term investment. For people of working age, we are rebuilding the welfare state around work, for both individuals and families. As I said earlier, paid work is the best form of welfare. It is the most secure means of averting poverty and dependence.

Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South

Does my right hon. Friend agree that the drug culture in many Scottish communities is also one of the aspects of poverty that has to be addressed?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

My hon. Friend is right. From bitter personal experience, I know that the drug culture in Scotland damages communities and families, and that it tragically destroys many young people's lives. Across Britain, 3,000 young people a year die from drug abuse. To destroy that culture, there must be action in the community against the criminal. That action must involve young people and investment in treatment and rehabilitation. Part of the rehabilitation culture must be the introduction of young people to education, training and employment opportunities.

The drugs problem is prevalent in the east end of Glasgow, where initiatives have been set up similar to those in other parts of Glasgow described by hon. Friend the Member for Glasgow, Anniesland. I welcome the comments of my hon. Friend the Member for Hamilton, South in that regard.

We are also changing the culture of the benefits system. We are moving away from a strategy based on the question "What money can we pay you?", to one based on the questions "How can we help you become more independent? How can we help families to help themselves? How can we help communities to rebuild and regenerate themselves, and to develop a self-confidence and a feeling of self-worth and commitment?"

Our approach works on two fronts—making it easier to move into work, and ensuring that work pays. One of the problems facing people moving into work is the gap between their final benefit payment and their first pay cheque. That is why we have introduced initiatives to ease this transition. Examples of that are the simplification of the housing and council tax benefit of the mortgage interest run-on, the lone parent's benefit run-on and the job grant.

We have introduced a number of measures to ensure that when people take up work, that work pays. Mention has been made of the working families tax credit and the national minimum wage. The House may want to know that, since the working families tax credit was introduced by my right hon. Friend the Chancellor, 120,000 families in Scotland have benefited. Moreover, 110,000 families in Scotland are benefiting from the national minimum wage. The combination of both those innovations means that no family with one person working full-time earns less than about £11,000 a year. That is a major step forward.

As my hon. Friend the Member for Glasgow, Anniesland pointed out, the Government have had great success with reducing unemployment. Since 1997, we have reduced long-term unemployment by more than 50 per cent. in Glasgow in general, and in the Anniesland constituency in particular.

Nearly 6,500 young people have found work in Glasgow through the new deal. Another 1,000 long-term unemployed have moved into work through the new deal 25 plus scheme.

We are constantly improving these new deals to help clients to match their current skills to vacancies in the labour market. New deals also help clients to gain new skills through education and training to meet the needs of local employers.

As we announced in November, we will soon be launching our pilots for our new StepUp programmes. In April, a pilot will start in east Ayrshire and another pilot will begin later in Edinburgh. These pilots will test out the provision of transitional jobs to act as a stepping stone for long-term unemployed people moving from benefits into work. In his speech, my hon. Friend the Member for Glasgow, Anniesland asked the Government to consider that matter specifically.

We have also introduced employment zones to help long-term unemployed people in some of the most deprived areas. Employment zones are looking at innovative ways to find local solutions to local problems. The employment zone in Glasgow works with local organisations such as the Wise group, and has already helped nearly 2,000 people find work.

I also agree with my hon. Friend that our focus needs to be wider than just those traditionally classed as unemployed. We must look to help more jobless people who would like to move into the labour market. We have launched 56 pathfinder offices for our new service, Jobcentre Plus, and their locations include Aberdeen, Livingston, Greenock and Port Glasgow. The offices will be rolled out over the next few years across the whole of Scotland.

This new service will give all benefit claimants the opportunity to find out about the help and support available to them if they move into work through work-focused interviews. Lone parents whose youngest child is of school age already benefit from having a work-focused interview at the start of their claim for income support. From April, these interviews will be extended to lone parents whose youngest child is three years old or older.

All lone parents who are out of work can benefit from our new deal for lone parents. This offers specialist help and advice to enable them to take up work. By the end of October, we had already helped more than 2,200 lone parents in Glasgow, and in Anniesland nearly 300 lone parents have been assisted in taking up employment.

Specialist help is also available for people on incapacity benefit through our new deal for disabled people. During the pilot phase, more than 8,200 people have been helped into work. In the summer, we launched a national network of job brokers who work with people on incapacity benefit to help them access the labour market.

These national programmes are complemented by our action teams for jobs. The teams work with local organisations to find innovative solutions to problems faced by people from disadvantaged groups such as those with disabilities, lone parents, homeless people and people with drug or alcohol problems. The action team in Glasgow was so successful at the start of this year that the team has been split into four and their collective budget has been increased by more than 700 per cent. to one in excess of £3.5 million.

That demonstrates our clear and specific strategy on employment. It works alongside initiatives taken by Glasgow and the communities there to develop self-help and a co-ordinated approach between central Government, local government and the community to the regeneration and refurbishment of communities for individual families and the community as a whole.

In his opening remarks, my hon. Friend alluded to the need for the Government to end pensioner poverty and design new systems to end it. He is absolutely right. Our pension strategy is simple: we want to ensure that all pensioners have a decent income in retirement. That is why it was important to introduce the minimum income guarantee, rough and ready as it was. We have been the first Government for two generations to take a positive decision to target elderly people who were being left out of the basic pension system and, as a consequence, were living in poverty. From a standing start, almost 2 million elderly people now receive on average between £15 and £20 a week that would never have been available to them had we not taken action. However, that was a short-term action; to deal with poverty now, we must modernise a pensions system to prevent future pensioners from falling into poverty.

In their Lordships' House is the State Pension Credit Bill which will soon come before this House. The Bill is about modernising the whole basis and concept of the pensions system, so that it will ensure a minimum guaranteed income for all pensioners, irrespective of how they access the pensions system, as well as for millions of hard-working pensioners who, under the current system and particularly under the Tories, were trapped at 100 per cent. for having small savings and small second pensions. The modernised state system will not only pay their basic minimum guarantee but will pay them extra for having small savings. They will benefit from having small savings or a small second pension.

In addition, we will take steps to assist people who work for employers have no form of pension savings. From a standing start, in the first seven months 80 per cent. of employers required to register for stakeholder pensions have registered. The big task is to turn those registrations into pension entitlements for many people who last year, before stakeholder pensions, had no pension opportunity. This year they have a pension opportunity.

The Government's step-by-step approach is working, but we cannot beat poverty in a few years. We certainly cannot beat poverty—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at sixteen minutes to Eleven o'clock. 28 January 2002: In col. 125, after "Clause read a Second Time" delete ", and added to the Bill"